Xiao Gang, the former chairman of the China Securities Regulatory Commission, said at the 2022 Tsinghua PBCSF Global Financial Forum on the 16th that since the public offering of infrastructure REITs has been listed and traded, the market has been running smoothly on the whole, and remarkable results have been achieved. The demonstration effect of the pilot project is good.At the same time, since my country’s public REITs are in the stage of expanding the pilot program, it is necessary to in-depth summarize practical experience, further study and improve relevant laws and regulations, optimize the operation mechanism, and strengthen investors.educateto promote the stable and long-term development of public REITs.
Xiao Gang believes that REITs should be regarded as an independentsecuritiesTypes of products, formulate special regulations, establish the nature and positioning of REITs, and build a set of institutional norms adapted to the characteristics of REITs, including issuance, listing, trading, information disclosure and investor protection.
He said that REITs currently use “public offerings”fund“+ABS” model is a feasible solution that complies with laws and regulations, which is conducive to the early start of the pilot and the ice breaking. However, this model also brings some problems, including too many levels of product structure, complicated legal relations, operating costs and supervision costs. Increase, the responsibilities of market entities and the difficulty of coordination increase.
“In response to the problems in the pilot, we should improve relevant laws, make new institutional arrangements, optimize product design, simplify product structure and transaction structure, improve supervision methods, further clarify the responsibilities of all parties involved in the market, and reduce product creation and operation costs. Promote the sustainable and healthy development of the REITs market.” Xiao Gang said.
In terms of optimizing the operation mechanism, Xiao Gang specifically mentioned three suggestions.
First of all, encourage local governments and enterprises to take out more high-quality assets to participate in REITs. Xiao Gang believes that it is necessary to expand the scale of REITs, to further find out the basic number of projects, to establish a classified project library, and to achieve “what should be entered”; it is necessary to further strengthen the department Coordinate with local governments to improve the transaction efficiency of state-owned assets, implement project application conditions, shorten the project application cycle, speed up project review progress, provide classified counseling services, and do a good job of demonstration and leadership, forming a virtuous circle of large-scale stock asset activation and new investment.
Secondly, promote the organic combination and joint improvement of infrastructure professional operation capabilities and capital operation capabilities. It is necessary to consolidate the responsibilities of the fund manager, and to give full play to the strategic management and professional operation capabilities of the original stakeholders, and to improve the governance level and project income are the problems that the REITs market needs to focus on in the future. The establishment of an efficient and transparent fundraising mechanism is conducive to revitalizing the reinvestment of stock assets, expanding and strengthening the industry-finance integration platform, reducing marginal operation and management costs, and enhancing the investment value of products.
Furthermore, further promote the formation of a market-oriented evaluation and pricing system. my country’s infrastructure construction has long relied on debt financing for a long time. After the launch of public REITs, it is objectively necessary to find an “anchor” for equity pricing. This requires the original rights holders and investors to play repeatedly for a long time to gradually form a market-oriented evaluation and pricing mechanism in line with my country’s actual situation, so that the original rights holders are willing to issue and investors are willing to invest.
(Article source: Shanghaisecuritiesnewspaper)